One of the world’s largest Multi-National conglomerate holding company Berkshire Hathaway has posted splendid second quarter results. The operating earnings of Berkshire Hathaway were up by 21% as compared to the same period an year ago.
In terms of comparison, Berkshire’s operating earnings last year were $5.51 Billion Vs $6.69 Billion in second quarter of 2021. This growth comes on the back of rebound in rail, energy, and utilities business of the company.
Buy Back Of Shares
The overall earnings of the company also saw a 6% increase to $28 Billion in the second quarter compared to an year ago. Berkshire Hathaway’s Warren Buffet chose to buy-back shares over inorganic growth via mergers and acquisitions.
In the second quarter alone, Berkshire Hathaway bough back shares worth $6 billion. This figure rises to a little over $12 Billion if the last sixth months are taken into consideration. Despite heavy FCF on its balance sheets (as usual), Warren Buffet decided the buy-back route to be ideal for the company. Berkshire Hathaway also bought a record $24.7 billion of its own stock last year.
Rebound In Economic Activity
The strength of Berkshire Hathaway during second quarter was the rebound in activities in the rail, energy, and utilities industry. In these business units alone, the earnings surged more than 27% compared to the same period in 2020.
However, this achievement does not extremely well with the management at Berkshire. They are aware that due to a lower base number, this growth seems massive but sustaining the growth can be a challenge.
Future Challenges
“The COVID-19 pandemic adversely affected nearly all of our operations during 2020 and in particular during the second quarter, although the effects varied significantly,” Berkshire highlighted during their presentation on Saturday. “The extent of the effects over longer terms cannot be reasonably estimated at this time.”
“Risks and uncertainties resulting from the pandemic that may affect our future earnings, cash flows and financial condition include the ability to vaccinate a significant number of people in the U.S. and throughout the world as well as the long-term effect from the pandemic on the demand for certain of our products and services,” Berkshire Hathawa emphasized upon.
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